Short-selling in S. Korea reaches all-time high at $114 bn in 2018

Short-selling transactions in South Korea’s stock market have exceeded 100 trillion won ($89.4 billion) for the first time this year as foreign investors went short on Korean stocks.

According to Korea Exchange on Monday, trading value of short-selling transactions reached an all-time high of 128 trillion won this year, up 34.7 percent from a year ago. Short-selling transactions have been on a rise in recent years with total value jumping 9 times this year since the country’s stock operator began compiling related data in 2009.

A total 4.6 billion shares were traded on short-selling scheme this year, up 37.3 percent from a year earlier. Transactions have renewed records every year since 2012.

Short selling is a legitimate investment scheme in which investors borrow shares and sell them immediately on the assumption that share value will go down, which allows them to repurchase the shares at a lower price to make profit on differences.

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This year, short stock sales accounted for 1.59 percent of total trading turnover and 4.57 percent of trading volume.

Market analysts noted that a surge in short-selling sales this year came as foreign investors increased their bets that Korean stock market will turn bearish. Foreign investors net sold about 6 trillion won worth of shares in the main Korea Composite Stock Price Index and secondary Korea Securities Dealers Automated Quotation markets this year.